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Op-Ed # 609 US Dollar May Lose Its Status As The Worlds Reserve Currency

  • Op-Ed # 609 US Dollar May Lose Its Status As The Worlds Reserve Currency

By Capt Joseph R. John, March 3, 2023 

In a survey three months ago, within an ongoing project conducted annually for nine years by Chapman University, the top 95 fears of Americans adults were analyzed, two of the top 10 fears in the survey that 53.7 % of those surveyed, reported they were concerned that they would not have enough money for future expenses, and were concerned of the possibility of economic and financial collapse because of the highest inflation rate in 40 years. The massive $30 Trillion+ in US debt that various administrations have created over the last fourteen years, and the restriction in the development of oil by the current administration, discussed in more detail in this Op Ed, are what is fueling the steady increase in inflation? 

The entire US economy is based upon the delivery of construction material, food products, fuel, steel, lumber, and items for retail sales, and transporting the cargo by diesel big rig trucks, air transport, ships, and railroads that are all fueled by oil; when fuel prices increase, the price of all items delivered increases. Over the last two years, the Biden/Obama administration has passed restrictive anti-oil regulations preventing American business, and the American people from having access to the low cost fuel that once was so plentiful.  By closing down pipelines that deliver oil from Canada, preventing oil exploration and recovery, preventing the recovery of natural gas, and preventing the development of clean and safe nuclear energy, the Biden/Obama administration has been driving the cost of fuel up, and with-it inflation.

Those actions by the Biden/Obama administration has resulted in the daily increases in the price of gas at the pump, driving the cost of products and services to skyrocket, which continues to fuel massive inflation. There is no feasible way that wind and solar energy that Socialist Democrats want Americans to use, to replace the energy created by coal fired plants, oil fired plants, by natural gas generation, or by nuclear energy, will ever happen. 

In a recent national poll of 1,000 American voters, conducted from February 17 to 22, 2023 by John McLaughlin, by a ratio of two to one, 60% of the American voters stated that the economy is getting worse; 33% disagreed.  Two-thirds of the voters, 65%, stated that the Bidenadministration has America on the wrong track; 30% stated it is going in the right direction.  Four in five of all the American voters, 79%, stated they have been negatively impacted by inflation, and 37% stated they are struggling to afford necessities.  Among all voters, 52% stated the economy is in recession, 60% among the undecided voters also stated the economy is in recession; 42% of voters disagreed. 

Amid the distractions caused by conflicts between Russia and Ukraine, Iran and Israel, and Communist China and Taiwan, supply shortages, the death of seven million people worldwide caused by Communist Chinese Virus, and the massive increasing inflation there has been a push for The Great Reset of the World Economy and restrictions on individual freedoms.  

Treasury Secretary Janet Yellen took the stage at an event called COP26 in Glasgow, Scotland to address many of the world’s most powerful western national leaders, she called for world leaders to commit $150 trillion for the Global Transition to The Great Reset of the World Economy.  Bank of America, 695 of the world’s largest corporations, billionaires Jeff Bezos, Elon Musk, George Soros, and Bill Gates, and the leaders of over 100 countries committed to invest in the transition, creating a world in economic uncertainty. 

The Biden/Obama administration signaled that they plan to raise Income Taxes, Death Taxes, Capital Gains Taxes, and Corporate Taxes, when those tax increases are taken with the massive inflation that is building, they will negatively affect the incomes of the families of hard working American taxpayers and contribute to the reduction of their retirement savings.  Over the last year, the major concerns of Americans has been how to protect and improve their wealth in the midst of pessimistic predictions of well-known and respected economists and financial experts, because of the coming tsunami of increasing inflation, the pending recession, and what effects they will have on their family’s savings, investments, and the value of the American Dollar.

Over the last two years, the Biden administration created an extremely poor relationship with the Kingdom of Saudi Arabia, by publicly calling Crown Prince Mohammed bin Salman a murdering pariah.  That attack on the Crown Prince by Biden fractured 76 years of a very close relationship between 7 Kings of Saudi Arabia and 13 Presidents of the United States.  The attack on the Crown Prince by Biden was the impetus that drove the King Salman of Saudi Arabia to finally accept the payment for crude oil with currencies other than with the World’s Reserve Currency, US Dollars (Petrodollars).   

A major concern for western economies in Japan, Australia, the United Kingdom, Switzerland, Canada, the United States, etc. is whether the US Dollar will remain as the World’s Reserve Currency.   Since the Kingdom of Saudi Arabia is no longer requiring the purchase of crude oil to be paid for by the World Reserve Currency, US Dollars (Petrodollars), Saudi Arabia, Russia, and Iran have been accepting payment for crude oil by the alternate currencies of the Russian Rubel and Communist China’s Juan.  

That recent developments has led to the concerns by world economies, that after 50 years of the US Dollar being the World Reserve Currency, that there may be a world monetary reset, with a new reserve currency backed by gold.  This had led to many countries and individuals investing in gold and silver as a hedge against a possible run on the American Dollar.  In a further attack on the US Dollar, to try to remove the US Dollar as the World’s Reserve Currency, Communist China recently launched the Shanghai-based “New Development Bank”, as a $500 billion rival to the International Monitory Fund (IMF) and the World Bank.

To further create uncertainty in the US Dollar, on November 15, 2022, the Federal Reserve (FED) announced they have the framework in place, and are now testing digital currencies, which is the ultimate Financial Censorship Tool; a digital currency would be nothing more than a computer code that is extremely vulnerable to theft, swindles, and illegal trades.  The FED is following Biden’s Executive Order #14067 and will join with 120 institutions and major banks like Citigroup, HSBC, Mastercard, and Wells Fargo to test the effects a digital currency will have on the US economy.  If the Biden/Obama administration, the Social Democrats, and Rinos in Congress vote to shifts to the “Digital Dollar”, it would negatively affect American voters freedoms, will affect civil liberties, eliminate privacy, reveal where Americans have their dollars, how many dollars each American has, what they are spending their dollars on, and would provide by computer print outs on those transactions for each American to the Federal Government and the IRS.   

The change in US Commercial Bank Regulations approved by the Biden/Obama administration, that recently eliminated the requirement for US Commercial Banks to retain 20% of deposited funds on hand to fulfill depositors demands, became of great concern to economists and financial experts because of the change that regulation created in the stability and conservatism of US Commercial Banks.  However, State Chartered Federal Credit Unions, remained much more conservative, and still require 20% of deposited funds to remain on hand to fulfill the demand of depositors.

Just what will occur in the future with all these issues facing our Republic and the World is anyone’s guess.  It seems logical, as in any environment, when taking the above information into consideration, it would prudent to diversify one’s asset base, to retain one’s wealth and savings.  Hard Assets like real estate, gold, and silver mentioned above would be a staple foranyone’s portfolio.  It would be important to make sure that the bank(s) where ones cash is deposited are not tied into risky derivatives, and that you have some liquidity in State Charted Federal Credit Unions, that have stricter and more conservative requirements than commercial banks at the present time.  

With the FED increasing interest rates every time they meet, which will likely continue throughout 2023, it is important to shop for the best rates in Money Markets, CD’s, and Annuities which have increased significantly in the last year.  A year ago, and for the last several decades, a One Million Dollar amount in those types of liquid assets, would likely bring in $10,000 in income annually.   Today, that same Million Dollars in well placed institutions, should bring in $60,000+ in income annually.  

With regard to Real Estate, and, in an effort to remain as a PASSIVE investor, without the burden of owning and having to manage properties, one could consider investing in a First Trust Deed Fund, managed by an experienced team of principals who have been making First Trust Deed and Real Estate Loans, successfully, for over 30 years.  Those First Trust Deeds are low loan to value, mainly short term (6 months to 18 months), that are secured by excellent, VALUE ADDED,  properties in areas where there is a shortage of housing (like Southern California, areas of Tennessee, Florida, etc.), and have applicants who are strong borrowers required to provide personal guarantees.  

In light of the above listed concerns, I have spent a great deal of time searching for such a First Trust Deed Fund in Southern California that meets the above listed criteria, and where there is a tremendous shortage of housing.  The main founder of the Fund has underwritten loans for over 30 years and the group of four General Partners have invested nearly $6 million, of the $47 million in the Fund’s total capital.  In the last 14 quarters, the Fund has paid over 8% Annualized and the latest quarter and year end it paid 8.54%.  

None of the loans made by the Fund have ever been foreclosed upon during that period.  Unlike stocks and bonds which fluctuate with various economic factors and changes in interest rates, this Fund has remained consistent in its rate of returns, likely between 8 and 9%.  While bonds are significantly losing their value with all these FED interest rate increases, this Fund is increasing its yield as bank financing dries up for these types of loans.  As to diversification, this type of Fund is one step up the liquidity ladder and will likely pay 3 to 4% more in rates than Money Markets, CD’s and Annuities, without a significant increase in investor risk.   

For full disclosure, I have made a significant investment in a First Trust Deed Fund, to preserve capital for my daughters, to avoid the possibility of dealing with Digital Dollars, in case the American Dollar is replaced as the World Reserve Currency creating instability in the American Dollar, and because the Biden administration’s economic policies will not correct upward spiral in inflation.  If you have an interest in investing in a First Trust Deed Fund, I will be pleased to provide you with contact information.  You can contact them on your own, and ask them to provide you with the type of Due Diligence package they sent me, that convinced me to invest to preserve my capital and avoid the coming tsunami of increasinginflation, and the recession predicted by a number of respected economists and financial experts.

Andy Schectman, President and Owner of Miles Franklin, discusses his thesis that the world is poised for a monetary reset which would result in the BRICS having their own reserve currency, likely backed by gold, and how this goes hand-in-hand with de-dollarization trends that are currently unfolding.  He tells Michelle Makori, Editor-in-Chief and Lead Anchor at Kitco News, how a “tsunami of inflation” would ensue, as dollars are repatriated to the United States, which would cause a corresponding “crash” in asset prices as interest rates rise accordingly. 

Click on the below listed You Tube link to watch a video of an interview of Andy Schectman discussing his overall recommendation of how to protect one’s wealth:

Copyright by Capt Joseph R. John.  All Rights Reserved.  The material can only be posted on another Web site or distributed on the Internet by giving full credit to the author.  It may not be published, broadcast, or rewritten without the permission from the author.  

Joseph R. John, USNA ‘62  
Capt         USN(Ret)/Former FBI  
Chairman, Combat Veterans For Congress PAC  
2307 Fenton Parkway, Suite 107-184